EU Strengthens Sanctions Regime Against Russia with 20th Package

The European Union has taken a significant step in strengthening its sanctions regime against Russia with the introduction of its 20th package. This new set of measures targets the architecture of crypto sanctions evasion, which has allowed Russian entities to circumvent previous sanctions.

The most consequential change for digital asset businesses and financial institutions is the ban on transactions between EU persons and Russian-established cryptoasset service providers (CASP). This includes exchanges, custodians, transfer providers, and decentralized platforms that allow the transfer or exchange of crypto assets. The measure aims to put the entire Russian-established sector off-limits to EU persons, regardless of whether individual platforms have been named.

The package also prohibits state-backed instruments, including the ruble-backed stablecoin RUBx, the digital ruble, and the Belarusian digital ruble. Additionally, payment agents that settle international trade through netting arrangements are restricted. This move aims to address the settlement mechanisms that move value around designated entities.

The EU's shift in approach reflects its recognition that designating individual operators has not stopped them from continuing their activities. The new measures are designed to disrupt the architecture of sanctions evasion, rather than just targeting specific platforms or instruments.